Kuldip Kumar, executive director (tax & regulatory practice), PwC, answers your questions
My mother had a fixed deposit (FD) with a public sector bank, which failed to deduct the TDS (tax deducted at source) before March 31. So, it did not reflect in her tax certificate. Although the bank subsequently deducted the TDS, she got a notice from the income tax department to pay tax. What should she do?
You have not mentioned whether your mother had taxable income in that year exceeding the threshold limit of Rs 2 lakh (Rs 2.5 lakh if her age is between 60 and 79; Rs 5 lakh if she's above 80 years. Also, did she file the tax return? If so, she would have considered the FD interest income in her taxable income and paid taxes due on the same while filing the return. If she included the FD interest and also considered the tax which the bank had deducted subsequently, then check your Form 26AS and provide the copy to the tax authorities as proof. If the tax deducted by the bank is not reflected in Form 26AS, ask the bank to correct the records filed with the tax authorities and obtain Form 16A from the bank, which you can provide to the tax authorities. That should close the matter. Your mother can access Form 26AS on the income tax website. I assume your query pertains to financial year 2013-14.
If your mother's taxable limit, after considering the FD interest, is below the threshold limit, there is no question of payment of any taxes. Rather, she will need to file the tax return and claim the tax deducted by the bank as 'refund'. She should accordingly respond to the notice from the tax authorities that she did not have any taxable income in the relevant year and, hence, no tax was due. Please note your mother cannot be held responsible for default on the part of the bank for failing to deduct the tax. However, if your mother has taxable income, she has the obligation to pay tax even if the payer (bank) did not deduct the same.
The views expressed are the expert's own. Send your queries to yourmoney@bsmail.in
My mother had a fixed deposit (FD) with a public sector bank, which failed to deduct the TDS (tax deducted at source) before March 31. So, it did not reflect in her tax certificate. Although the bank subsequently deducted the TDS, she got a notice from the income tax department to pay tax. What should she do?
You have not mentioned whether your mother had taxable income in that year exceeding the threshold limit of Rs 2 lakh (Rs 2.5 lakh if her age is between 60 and 79; Rs 5 lakh if she's above 80 years. Also, did she file the tax return? If so, she would have considered the FD interest income in her taxable income and paid taxes due on the same while filing the return. If she included the FD interest and also considered the tax which the bank had deducted subsequently, then check your Form 26AS and provide the copy to the tax authorities as proof. If the tax deducted by the bank is not reflected in Form 26AS, ask the bank to correct the records filed with the tax authorities and obtain Form 16A from the bank, which you can provide to the tax authorities. That should close the matter. Your mother can access Form 26AS on the income tax website. I assume your query pertains to financial year 2013-14.
If your mother's taxable limit, after considering the FD interest, is below the threshold limit, there is no question of payment of any taxes. Rather, she will need to file the tax return and claim the tax deducted by the bank as 'refund'. She should accordingly respond to the notice from the tax authorities that she did not have any taxable income in the relevant year and, hence, no tax was due. Please note your mother cannot be held responsible for default on the part of the bank for failing to deduct the tax. However, if your mother has taxable income, she has the obligation to pay tax even if the payer (bank) did not deduct the same.
The views expressed are the expert's own. Send your queries to yourmoney@bsmail.in